MikeTarsala

"We're pleased with the results of the quarter -- we had good execution across the globe," said Tom Siebel, the company's chief executive, in a conference call. "The product family is positioning itself very competitively."

Siebel said he feels "cautiously optimistic" about prospects for the second quarter, noting that "this [technology] recovery that we're seeing is fragile." He told investors to expect earnings of 6 cents to 8 cents a share, based on revenue of $340 million to $355 million. Analysts polled by Thomson First Call are expecting earnings of 7 cents a share, based on sales of about $352 million.

Siebel shares
SEBL
fell 19 cents to close at $11.66 in regular-session Nasdaq trading, ahead of the announcement. The stock is up from $7.50 near the end of April last year.

The maker of software used to track customer interactions reported first-quarter net income of $31.7 million, or 6 cents a share, up from $4.6 million, or 1 cent a share, in the first quarter a year earlier. Analysts polled by Thomson First Call expected earnings of 5 cents a share, on average.

Siebel slashed total operating expenses by 12 percent from the same period last year by cutting costs for product development, sales and marketing, and general and administrative work. The company's cost of goods sold also fell, helping the software maker boost its gross margin.

Revenue fell about 1 percent to $329.3 million, down from $332.8 million a year earlier, due mostly to lower services revenue. Software license sales, a key measure of demand for software companies, rose 13 percent to $126.8 million, as the company signed 109 new licensing contracts.

"License sales are good," said Ken Kiarash, Buckingham Research analyst. "Guys within the company are pretty bullish about their offerings, their new products, and about the market turning around."

According to Kiarash, Siebel is gaining market share vs. Epiphany and other smaller competitors. He says customer budgets are getting looser and more companies are choosing Siebel's software, even if its costs more than some other offerings.

"Two years ago, when pricing was a big issue for companies, they were going with Epiphany," Kiarash said. "Now they are spending more, and they want a strategic long-term partner for their projects."

Siebel generated $110 million in cash in the quarter, boosting its balance of cash, equivalents and short-term investments to $2.13 billion.

The company continued to collect at roughly the same rate from its customers. Average days sales outstanding on receivables were 63 days, vs. 64 days a quarter ago, and 63 days in the same period last year.

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